Legal pot now nearly 80 percent more expensive than illegal: StatsCan

Illegal cannabis has gotten even cheaper in Canada according to a new report from Statistics Canada, with legal cannabis now up to 80 percent more expensive than illicit cannabis.

According to Statistics Canada, in the second quarter of 2019 (from April 1 to June 30), the reported price of illegal cannabis per gram fell from $6.23 in the first quarter to $5.93 in the second.

At the same time, legal cannabis prices rose from $10.21 per gram to $10.65 in the second quarter.

That makes legal cannabis nearly 80 percent more expensive than illegal cannabis with a price difference of $4.72, up from a $3.62 difference reported in the first quarter of 2019. 

The drop in the illegal price offset the rise in the legal price to lower the overall average price of cannabis down from $8.03 per gram in the first quarter to $7.87 in the second.

Statistics Canada got its results from 572 plausible entries in the second quarter to its cannabis crowdsourcing app, StatsCannabis. The user-submitted information was compared to cannabis prices collected from illegal online stores, but not illegal storefronts. The agency has collected over 423,000 prices since May 2018.

Lower illegal weed prices, higher illegal sales

Perhaps unsurprisingly due to the price difference, StatsCan says that those purchasing from illegal sources rose from 55 percent in the first quarter of 2019 to 59 percent in the second quarter.

Those who said they purchased illegal cannabis because of “legal cannabis being too expensive” rose from 27 percent of respondents in Q1 to 34 percent of respondents in Q2.

The rollout of legal cannabis since legalization last October has been rocky, with issues of supply shortages, few retail stores and high prices causing consumers to stick to the black market.

The availability of retail stores does seem to be improving, though, with Ontario recently announcing 50 new stores to open in the province by the fall.

The retail improvement was evident in the StatsCan’s numbers, with those who said they purchased illegal cannabis because of “difficulty accessing legal cannabis” falling from 18 percent in Q1 to eight percent in Q2.

“This aligns with an increase in government-licensed retailers in recent quarters,” StatsCan said in its report.

Data has shown that customers prefer legal retail outlets to legal online stores when purchasing cannabis. 

According to Allan Rewak, Emerald Health Therapeutics’ VP of communications and the former executive director at the Cannabis Council of Canada, 80-95 percent of sales in jurisdictions with a decent network of stores, such as Alberta and the east coast, were at physical locations rather than online.

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